China, HK stocks rise despite grim data as investors bet on Chinese chips

China and Hong Kong stocks rose on Monday despite weak economic data, as investors redoubled bets on Chinese tech shares amid Sino-U.S. trade talks and ahead of an expected U.S. rate cut this week. ** Shanghai stocks added 0.2% by the lunch break, flirting with fresh 10-year highs. China's blue-chip CSI300 Index gained 0.9%, hitting the highest in 3-1/2 years.

** Hong Kong's benchmark Hang Seng Index rose 0.3%, almost touching a fresh four-year high. ** Data released on Monday showed China's economy slumped in August, with factory output and retail sales growths missing forecasts and home prices continuing to fall. China's credit, exports and fixed asset investments also saw sluggish growth.

** Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, said the broadly dismal data were already priced in by the market. ** "The slowdown is not a surprise to the market. Investors already expect growth to weaken in the third quarter," Zhang said.

** Investors also looked past geopolitical and trade tensions, taking cues from Wall Street's record highs, with the Federal Reserve widely expected to cut rates this week. ** The market appears not bothered by tariff uncertainties as China and the U.S. began negotiations in Madrid on Sunday, and Washington called on its allies to impose tariffs on Russian oil buyers.

** Underscoring the complexity of the Sino-U.S. ties, China's Ministry of Commerce launched anti-discrimination and anti-dumping probes against U.S. chips on Saturday. ** "The U.S. seeks to suffocate Chinese innovation. China has no choice but to fight back," said Abraham Zhang, chairman of China Europe Capital. "This is a rare opportunity for domestic players to replace foreign technologies."

** China's semiconductor stocks jumped, with Shanghai's STAR Chip Index rising 1%. Hong Kong's Hang Seng Tech Index climbed 1%. ** Elsewhere, Chinese battery stocks jumped on government plans to boost the sector, while property shares fell on disappointing home price data.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)